New Emission Standards Put Squeeze on OEMs

Strict new federal fuel-economy and carbon-emission standards made final Tuesday are the biggest technological challenge to the auto industry since the government began regulating emissions in 1970 and mileage in 1975.

According to a report by USA Today, the rule sets the equivalent of 54.5 miles per gallon as the average the auto industry must achieve by 2025, up from 29.7 mpg now and 35.5 mpg in 2016.

The tough “CAFE” standard (for corporate average fuel economy), which was to be announced earlier this month, was announced Tuesday by the Obama administration on the day that Republicans’ national convention got underway in Tampa.

It is “a monumental day for the American people,” Transportation Secretary Ray LaHood said in announcing the final rules.

And it’s the script for a likewise monumental change in the cars and trucks Americans drive. The vehicles will undergo more urgent evolution of current trends so that, in a decade or so, the American streetscape could resemble science fiction, including:

• More gas-electric hybrids and plug-in hybrids. More electric cars. A few that run on natural gas. Maybe a few more hydrogen-fueled cars.

• Smaller cars powered by smaller gasoline engines, most using turbochargers to get back the power they lose as they give up size.

• Dashboards that resemble video games, giving you colorful “atta-boys” when you drive with a light foot.

• More parts made from composites and high-price aluminum, titanium and high-strength steel — metals which have the additional hidden cost of wearing out fabrication equipment in auto assembly plants faster than conventional steel.

• Oval car bodies to slice the air. Sophisticated, many-speed transmissions and CVTs (continuously variable automatic transmissions) that can keep the engines running in their sweet spots where they make the most power on the least fuel.

Will car buyers embrace the new vehicles? “The risk is pushing technological demands beyond the automakers’ ability to deliver. The smarter way to approach it is to let the market guide vehicle fuel-efficiency standards,” says Jeremy Anwyl, vice chairman at auto-shopping site Edmunds.com.

Trucks get an early break

According to USA Today, Environmental Protection Agency Administrator Lisa Jackson said trucks get a break initially because they often are work or tow vehicles that need bigger, more fuel-thirsty engines and will be harder to turn into high-mpg vehicles. “Cars are ramping down faster than trucks, and they catch each other at the end,” she said.

Automakers, through their lobby group Alliance of Automobile Manufacturers, had signed on to back the new regulation, and said Tuesday: “After years of billion-dollar investments by automakers, consumers have a lot of choice in fuel-efficient cars and light trucks, and automakers are working to sell these high-mileage vehicles in high volumes.”

The Alliance statement added, “Compliance with higher fuel-economy standards is based on sales,” drawing a distinction between what buyers will accept and what automakers might be forced to build to meet the tighter regulations.

The final rule directs the government to review progress in five years. It then could revise the regulations, if necessary. “Automakers will be looking for a rigorous midterm review with periodic check-ins since it is difficult to predict three years in advance, let alone 13 years,” the Alliance said.

In another “extra credit” feature of the rule, vehicles that burn natural gas or are powered by electricity are counted more heavily in calculating compliance with the rule than are conventional gasoline-powered vehicles that hit the targets.

Diesels, though more fuel-efficient by nature, however, get no extra credit in the regs. Alliance members VW and Mercedes-Benz, both backers of diesel power, have objected to the rule for that reason.